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Committee Debates Issues Over Privatizing Lottery

TRENTON, N.J. (AP) â¿¿ A state Assembly panel appeared divided Wednesday on whether a private company should take over management of the New Jersey Lottery, with Democrats urging officials to move cautiously and Republicans viewing the idea as an innovative way to possibly improve operations and revenues.

Under the plan being pushed by the Christie administration, the state would still own the lottery, but a private company would be responsible for sales and marketing. The company would keep a portion of the profits and would be penalized if revenue falls below expectations.

The winning bidder would have to pay the state $120 million up front and sign a 15-year contract.

Several Democrats who sit on the Budget Committee questioned why the state was interested in making a switch, saying "more transparency" was needed on the proposal and possible ramifications.

"Privatization should be reserved for when the government cannot perform that function well on its own," said Chairman Vincent Prieto, D-Hudson. "In the case of our award-winning lottery system, we have one of the most efficient operations in the world ... It appears that the only one that stands to benefit from this proposal is the company chosen to take over this asset."

Republicans, though, see the privatization plan as a way to help boost lottery sales and raise more revenue.

"It is incumbent upon government to look for new ways to do things better and this administration has done that time and time again," said Assemblyman Anthony Bucco, R-Morris. "This proposal is strictly performance-based. If the winning bidder doesn't put up increased revenues, the state will always have the ability to terminate the contract."

Small business owners who sell lottery tickets told committee members that the change could cost them money, since they use the sales to draw in customers who often buy other products.